The best-known framework for analyzing value creation is the value chain, which shows a systematic process to examining the development of competitive advantage. While a few empirical studies have investigated the relationships between knowledge value chain and work performance, this theoretical paper explores the fundamental issue of how knowledge management (KM) capabilities impact work performance. This study explored two major questions: (1) How KM capabilities of knowledge value chain can be defined properly? and, (2) How knowledge value chain positively impacts perceived work performance in value chain way? Drawing on the knowledge-based view of the firm, the paper identifies knowledge value chain according to knowledge management capabilities. The results indicate that KM capabilities for knowledge acquisition, conversion, sharing, and application positively impact work performance as value chain. The results also indicate that KM capabilities may improve performance by a value chain way. In general, the results also help understand the complex role of knowledge value chain have impact on work performance.